Lithium prices have attracted some attention of late. This
is mainly due to some market participants claiming that 2013
will be a “flat year” for pricing, while others have
told IM that supply has fallen off, causing
prices to lift.
Lithium leader FMC Corp. said
during a conference call in May that it believed demand would
remain at around 10% CAGR for lithium.
Lithium demand is expected to
increase, but 2013 “is a flat year for pricing,” CEO
Pierre Brondeau said.
“In terms of pricing 2013 is a
year of flat pricing. There is not much change on the market
today, and we have stability,” he told investors during a
webcast.
The company revealed in its results
that as well as a planned outage in the third quarter of this
year at its lithium plant in Argentina, it will also be closing
down in Q2 2013.
Elsewhere, Brondeau said that it
expects growth for electric vehicles to take off post 2015,
which will also increase lithium demand.
“We are seeing the growth for
EV Ñ if it takes off Ñ to take off post 2015. And
it’s a bit slower than what most companies would have said
one or two years ago,” he specified, adding that
“there is no significant change or increase in pace in
this market today”.
Growth, from an energy standpoint,
will more likely be driven by electronic devices than it is by
electric vehicles, Brondeau added.
Soda ash
Brondeau also said a price increase
in soda ash is expected in Q3 2013.
The CEO said he saw some demand
recovery in flat glass markets in China, but not in North
America.
“Despite the fact that Chinese
GDP is not as robust as what we were expecting, some of the
(...) leading markets for soda ash are showing strength. And
we’re talking about the automotive industry, as well as
the flat glass industry,” Brondeau explained.
Referencing the recent $30/tonne
increase on non-contract and contract sales of soda ash made by
ANSAC at the beginning of April, Brondeau said that this was a
move to increase prices to Asia.
“ANSAC and all of the members
of ANSAC have decided on a price increase for Asia of
[$30/tonne],” he said.
Contracts for soda ash are becoming
more liquid and moving away from a quarterly model, he
added.
“We are confirming, and our
people on the ground over there have confirmed, that the
Chinese producer[s] (...) are not giving three month contracts
anymore. We just confirmed that. We had a team flying out to
Asia last week. They’re only going with monthly supply,
which usually is a very good indication,” he added.
Indeed, at the beginning of April
ANSAC said that its growth in sales volume over the last few
years had started to outpace its ability to load and ship
tonnes “in the reliable manner we deem
essential”.
“Organic growth and buyers
moving to us for our service and reliability has resulted in
almost 1m tonnes of growth from 2011 to 2013” ANSAC CEO
John Andrews said at the time.
Bromine
Chinese chemical manufacturer Gulf
Resources Inc. reported a fall in net income to $1.9m for Q1
2013, down from $3.3m for the same quarter a year ago in
May.
The bromine, crude salt and
speciality chemical producer highlighted a 9% drop in bromine
prices year-on-year (y-o-y) as a key reason behind the
decline.
“Due to the lower demand [for]
bromine as influenced by continuing macroeconomic tightening
policy imposed by the Chinese government, the average selling
price of bromine decreased from $3,560/tonne for the first
quarter [of] 2012 to $3,053/tonne for the same period this
year,” CEO Liu Xiaobin said.
“We reported lower operating
performance in this quarter in comparison to the same period of
last year, as we were unable to offset the decreasing revenue
of [the] bromine segment by [increasing revenues from the]
crude salt and chemical products segments,” he added.
Liu also blamed cold weather at the
start of the year and a lull in Chinese economic activity over
the Chinese New Year for the figures, but noted that Q1 2013
bromine prices had increased from Q4 2012 levels of
$2,954/tonne, indicating an increase in demand.
When asked during the post-earnings
conference call about future movements in the price of bromine,
Liu said that he expected the price to increase slowly over the
next six months.
In January, Gulf forecast that
average selling prices of bromide would increase during 2013,
and that the company’s business performance would grow 30%
y-o-y, assuming China’s attempts at stimulating domestic
economic growth are successful.
Bromine compounds are principally
used in flame retardants incorporated into household plastics
and fabrics, as well as to make clear brines for the oil
drilling industry.
Iodine prices: soft but
steady
TSX-listed iodine producer Sirocco
Mining Inc. also reported that prices for iodine were 15% lower
during the first three months of 2013 than those seen in the
corresponding period in 2012.
Prices paid for the company’s
sales of 217 tonnes iodine averaged $55/kg, compared to $65/kg
a year ago.
The company said that its latest
set of results had been negatively affected by iodine sales
deferred to Q2 2013 owing to a March port strike in Chile;
reduced iodine prices; and high exploration costs.
Commenting on the results, Sirocco
CEO, Rick Clark, said: “Production [of 363 tonnes] in Q1
2013 was very strong, a 29% improvement over Q4 2012. Gross
profits as a percentage of sales also improved in Q1 2013
compared to the last quarter in 2012, notwithstanding a
decrease in iodine prices from the all time highs achieved in
2012.”
Sirocco’s report on the iodine
prices support views on recent trends observed in the market
more widely.
US-based iodine company Iofina plc.
reported a 16% increase in revenues at the beginning of May,
and said that prices for iodine were holding steady.
One South American producer
recently told IM that combined spot and
contract prices for iodine (crystal, 99.5% min, delivered
Europe or US) were between $60-70/kg, although this has been
unsupported by pricing contacts elsewhere.
A Europe-based sources said that
there was significant variation in the iodine market at
present.
ÊAlthough European source
acknowledged the possibility that pockets of higher pricing
existed, they doubted whether IM’s ranges
of $59-65/kg for spot, and combined spot and contract; or
$59-62 for contract orders, were being realised across the
board.
A report released in April by
UK-based Roskill Information Services stated that
iodine prices had continued to soften in the first quarter of
2013, dropping to around 11.5% below Q1 2012 levels.
The report speculated that this
decline may have resulted from production rising at a higher
rate than consumption, adding that prices may decrease further
through 2013 if production targets are reached, and demand
rises at a rate of 3.5% per annum, as forecast.
If this does occur, by Q1 2014,
contract prices may be 10% below Q1 2013 levels, after which
Roskill notes that prices are forecast to rise progressively at
a low rate until 2017.
Rare earths
Some individual rare earth prices
slipped sharply again in May, with indexes tracking the mineral
reporting an average 15% decline in the price of neodymium
oxide (IM price: $75-$80/kg) and cerium oxide
(IM price: $8-%11/kg).
Prices for Europium oxide have
fallen almost 6% (IM price: $1470-$1670/kg),
while dysprosium oxide weakened by 3% (IM
price: $56-$800/kg).
Rare earth carbonate prices are
reported to be firmer, however, with prices remaining broadly
flat in recent weeks, according to market sources.
In early May, China’s vice-minister for industry, Su
Bo, blamed the price weakness partly on illegal rare earths
production and smuggling, practices which Su said were
contributing to a supply glut and distorting both domestic and
international prices.
